The Census Bureau's retail sales report Thursday showed a nice rebound in consumer spending activity in May. Retail sales rose by a greater than expected 0.6%, the strongest reading since February, after increasing 0.1% in April. Economists, on average, were expecting a rise of 0.4% in May.

"No, retail sales was eyepopping," said Doug Cote, chief market strategist for ING U.S. Investment Management. "That's a big number, because it defies all the strategists that thought the consumer was dead; the consumer is alive and well."

Gannett, PVH Corp. and Safeway were among the S&P leaders on Wednesday.

Gannett surged 34% to $26.60 as the owner of newspapers and television stations said it is buying Belo Corp. for $13.75 a share in cash, or about $1.5 billion, in a deal the nearly doubles Gannett's current broadcast portfolio. Belo shares soared 28.3% to $13.77.

Safeway jumped 7.4% to $24.82 after saying Wednesday it plans to sell its Canadian supermarket operations to Sobeys, the No. 2 grocery store operator in Canada, for $5.7 billion. Safeway will have about 1,400 stores in the U.S. after the deal.

PVH Corp. popped 10.2% to $122.60 after the apparel maker booked first-quarter earnings that exceeded the average analyst earnings estimate of $1.35 a share at $1.91 a share thanks to stronger sales at Tommy Hilfiger and Calvin Klein.

Markets surged on Wednesday, despite the week-long drag that worries of Fed tapering has had on traders.

"With the next FOMC meeting just up ahead next week, sentiments are very divided and the market is very sensitive to any hint of what Fed is going to do," Joyce Liu, an investment analyst at Phillip Futures in Singapore said in a note.

"The market is extremely sensitive to any news that has the slightest relation to U.S. monetary policies now," she said.

The Labor Department reported that weekly initial jobless claims slipped by 12,000 to a less than expected 334,000 in the week ended June 8. Economists, on average, were expecting jobless claims of 345,000. The four-week moving average was 345,250, a decrease of 7,250 from the previous week's unrevised average of 352,500.

Continuing claims during the week ending June 1 was less than predicted at 2.973 million, an increase of 2,000 from the preceding week's level of 2.971 million. Economists were expecting continuing claims of 2.975 million.

The U.S. Bureau of Labor Statistics reported that prices for U.S. imports declined 0.6% in May after a 0.7% drop the prior month thanks to falling fuel and nonfuel prices, reflecting subdued inflation pressures. U.S. export prices fell 0.5% after a decline of 0.7% in April.